Asha and Nisha are partners sharing profits and losses in equal ratio. From the following Trial Balance and adjustments you are required to prepare Final Accounts:
| Trial Balance as on 31st March, 2019 | |||
|---|---|---|---|
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
| Purchases | 48,000 | Capital accounts: | |
| Salaries | 7,500 | Asha | 80,000 |
| Wages | 2,800 | Nisha | 40,000 |
| Advertisement (2 years) | 4,000 | Bank Overdraft | 34,000 |
| Sales Return | 8,000 | Sales | 1,48,000 |
| Motor Van | 63,000 | R.D.D. | 1,200 |
| Stock (1. 4. 2018) | 94,500 | Purchase Return | 6,000 |
| Sundry Debtors | 62,800 | ||
| Coal, Gas and Fuel | 1,000 | ||
| Plant and Machinery | 17,600 | ||
| 3,09,200 | 3,09,200 | ||
| Adjustments: | |||
| Closing stock is valued at cost ₹ 88,000 and market price ₹ 90,000. | |||
| Asha and Nisha withdrew goods from business ₹ 3,000 and ₹ 2,000 respectively for their personal use. | |||
| Depreciate Motor Van by 5% and Plant and Machinery by 7%. | |||
| Reserve for Doubtful debts on Debtors at 5% is to be created. | |||
| Outstanding Wages ₹ 800. |
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Start your 14-day free trial to unlock the full solution →Closing stock is valued at cost ₹ 88,000 (lower of cost and market). Goods withdrawn ₹ 5,000 reduce purchases and become drawings. Depreciation: Motor Van 5% = ₹ 3,150, Plant & Machinery 7% = ₹ 1,232. New R.D.D. at 5% on ₹ 62,800 = ₹ 3,140 (less old ₹ 1,200 → ₹ 1,940 to P&L). Advertisement ₹ 4,000 is for 2 years → ₹ 2,000 this year, ₹ 2,000 prepaid. Outstanding wages ₹ 800 added. Result: Gross Profit ₹ 91,900, Net Profit ₹ 76,078 split equally, and a Balance Sheet tying at ₹ 2,25,878.
Trading Account for the year ended 31st March 2019
| Dr. Particulars | Amount ₹ | Cr. Particulars | Amount ₹ |
|---|---|---|---|
| To Opening Stock | 94,500 | By Sales 1,48,000 − Return 8,000 | 1,40,000 |
| To Purchases 48,000 − Return 6,000 − Goods withdrawn 5,000 | 37,000 | By Closing Stock (at cost) | 88,000 |
| To Wages 2,800 + Outstanding 800 | 3,600 | ||
| To Coal, Gas and Fuel | 1,000 | ||
| To Gross Profit c/d | 91,900 | ||
| Total | 2,28,000 | Total | 2,28,000 |
Profit & Loss Account for the year ended 31st March 2019
| Dr. Particulars | Amount ₹ | Cr. Particulars | Amount ₹ |
|---|---|---|---|
| To Salaries | 7,500 | By Gross Profit b/d | 91,900 |
| To Advertisement (1 year of 2) | 2,000 | ||
| To Depreciation on Motor Van (5%) | 3,150 | ||
| To Depreciation on Plant & Machinery (7%) | 1,232 | ||
| To R.D.D. (new 3,140 − old 1,200) | 1,940 | ||
| To Net Profit c/d (Asha 38,039 + Nisha 38,039) | 76,078 | ||
| Total | 91,900 | Total | 91,900 |
Balance Sheet as on 31st March 2019
| Liabilities | Amount ₹ | Assets | Amount ₹ |
| --- | --- | --- | --- | …
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